Valmont Industries, Inc. (NYSE: VMI), a leading global provider of engineered products and services for infrastructure development and irrigation equipment and services for agriculture, today reported financial results for the fourth quarter and fiscal year ended December 26, 2020.

Fourth Quarter 2020 Highlights (all metrics compared to Fourth Quarter 2019 unless otherwise noted)

  • Net Sales of $798.4 million increased 16.8% led primarily by significantly higher sales in Irrigation and Utility Support Structures
  • Operating Income of $54.1 million, or 6.8% of sales ($68.8 million or 8.6% of sales adjusted1) compared to $50.8 million or 7.4% of sales last year
  • Diluted Earnings per Share (EPS) improved to $1.68 ($2.20 adjusted1) compared to $1.51; GAAP EPS includes a ($0.38) impact related to the Voluntary One-Time Early Retirement Benefit Program
  • Repurchased 190,000 shares of company stock in the fourth quarter for $28.5 million, at an average price of $149.93 per share
  • Recognized a more favorable tax rate primarily due to a one-time benefit of a recently-enacted U.S. tax regulation, resulting in an EPS benefit of $0.05 per diluted share
  • Record year-end backlog of more than $1.1 billion, reflecting strong market demand
  • Commenced shipments for the recently-awarded, multi-year $240.0 million supply agreement to provide irrigation products and services for the Egypt market
  • Completed the acquisition of the remaining 40% stake of Torrent® Engineering and Equipment in the Irrigation segment

Full Year 2020 Highlights (all metrics compared to Full Year 2019 unless otherwise noted)

  • Net Sales of $2.9 billion increased 4.6%

    • Significantly higher sales in the Utility Support Structures and Irrigation segments were partially offset by lower sales in the Engineered Support Structures and Coatings segments due to COVID-19 impacts; excluding $22.2 million of unfavorable currency impacts, sales grew 5.4%
  • Operating Income of $226.0 million, or 7.8% of sales ($268.5 million or 9.3% of sales adjusted1) compared to $227.9 million or 8.2% of sales last year; profitability was similar to last year on a GAAP basis, and increased $40.6 million, or 17.8% on an adjusted basis

    • Profitability improvement was led by higher volumes in Utility Support Structures and Irrigation, and favorable pricing in Engineered Support Structures
    • Operational performance improved in all segments except Coatings, where end-market demand was negatively impacted by COVID-19
  • Diluted Earnings per Share of $6.57 ($8.18 adjusted1) compared to $6.73; EPS decreased $0.16, or 2.4% on a GAAP basis and increased $1.45, or 21.5% on an adjusted basis
  • Generated strong operating cash flow of $316.3 million, driven by higher receipts of customer advance payments and other working capital management initiatives; strong liquidity led to a reinstatement of share repurchases in September, with year-end 2020 cash and cash equivalents of $400.7 million
  • Capital expenditures were $107.0 million, including $42.0 million for strategic investments, which included capacity expansions in existing North American operations, a greenfield expansion in Pittsburgh, PA in the Coatings segment, and technology investments to support global market growth
  • Deployed $75.3 million of cash for strategic acquisitions, including $15.9 million inclusive of two acquisitions in the Irrigation segment: Solbras and PrecisionKing™, and $59.4 million for the remaining stakes in AgSense® and Torrent® Engineering and Equipment
  • Returned $93.4 million of capital to shareholders through share repurchases of $56.5 million and dividends of $36.9 million
  • Advanced ESG to be a top strategic imperative, including formation of a CEO-led ESG Taskforce, elevating our tagline of 'Conserving Resources. Improving Life®.'

Key Financial Metrics

Fourth Quarter 2020

GAAP

 

Adjusted1

 

 

 

12/26/2020

4Q 2020

 

12/28/2019
4Q 2019

vs. 4Q 2019

 

12/26/2020

4Q 2020

 

12/28/2019
4Q 2019

vs. 4Q 2019

Net Sales

$

798,377

 

 

$

683,626

 

16.8%

 

$

798,377

 

 

$

683,626

 

16.8%

Operating Income

54,139

 

 

50,765

 

6.6%

 

68,799

 

 

50,765

 

35.5%

Operating Income as a % of Net Sales

6.8

%

 

7.4

%

 

 

8.6

%

 

7.4

%

 

Net Earnings

35,815

 

 

32,540

 

10.1%

 

46,856

 

 

32,540

 

44.0%

Diluted Earnings Per Share

$

1.68

 

 

$

1.51

 

11.3%

 

$

2.20

 

 

$

1.51

 

45.7%

Average Shares Outstanding

21,342

 

 

21,596

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Full Year 2020

GAAP

 

Adjusted1

 

 

 

12/26/2020
FY2020

 

12/28/2019
FY 2019

vs. FY 2019

 

12/26/2020
FY 2020

 

12/28/2019
FY 2019

vs. FY 2019

Net Sales

$

2,895,355

 

 

$

2,766,976

 

4.6%

 

$

2,895,355

 

 

$

2,766,976

 

4.6%

Operating Income

225,953

 

 

227,905

 

(0.9)%

 

268,462

 

 

227,905

 

17.8%

Operating Income as a % of Net Sales

7.8

%

 

8.2

%

 

 

9.3

%

 

8.2

%

 

Net Earnings

140,693

 

 

146,408

 

(3.9)%

 

175,302

 

 

146,408

 

19.7%

Diluted Earnings Per Share

$

6.57

 

 

$

6.73

 

(2.4)%

 

$

8.18

 

 

$

6.73

 

21.5%

Average Shares Outstanding

21,425

 

 

21,769

 

 

 

 

 

 

 

"We achieved strong sales and earnings growth this quarter as we remained highly focused on execution and pricing across the portfolio, despite an extraordinary macroeconomic environment,” said Stephen G. Kaniewski, President and Chief Executive Officer. “Sales growth was driven by strong demand in the Utility Support Structures segment, including significantly higher sales of renewable energy products. Additionally, our Irrigation segment delivered strong growth in sales and operating income driven by improved farmer sentiment from higher agricultural commodity prices and first deliveries of the large, multi-year project for the Egypt market during the quarter. Performance in the both the Engineered Support Structures and Coatings segments continued to improve. We recognized another quarter of solid operating cash flows, driven by our strategic priorities for working capital management."

Kaniewski continued, “As we reflect on 2020, I want to thank our entire Valmont team of 10,000 global associates. Their hard work and dedication enabled us to achieve solid sales, operating profit, and earnings growth, as well as significant cash flow, demonstrating their agility to execute our strategy for long-term profitable growth, even in an unprecedented environment. The safety of our employees and commitments to our customers remain our top priorities. I'm very proud of our global team's continued resilience in safely navigating COVID-19 while supporting critical infrastructure sectors and food security around the world. As we approach our 75th year as a company, we have elevated ESG to permeate throughout our entire business. Our long-standing tagline of 'Conserving Resources. Improving Life.®' fully encompasses our purpose as a Company, and demonstrates our commitment to helping advance a more resilient and sustainable world.”

Fourth Quarter 2020 Segment Review

Infrastructure

Utility Support Structures Segment (33.9% of Sales)

Steel, concrete and composite structures for utility markets, including transmission, distribution, substations, and renewable energy generation equipment

Sales of $271.0 million grew 16.9% year-over-year, led by higher volumes from strategic capacity additions in existing North American operations, and higher sales of global generation products. Volume increases were partially offset by the negative sales impact of lower steel costs when compared to last year.

Operating Income was $25.6 million or 9.4% of sales ($28.0 million adjusted1 or 10.3% of sales) compared to $26.3 million, or 11.4% of sales in 2019. While higher volumes and improved operational performance led to higher profits, quality of earnings was negatively impacted by a higher sales mix of offshore and other complex steel structures.

Engineered Support Structures Segment (32.1% of Sales)

Poles, towers and components for the lighting, traffic and wireless communication markets, engineered access systems, integrated structure solutions for smart cities, and highway safety products

Sales of $256.1 million were similar to last year, as lower volumes, primarily in international markets, were offset by $6.6 million of favorable currency impacts and favorable pricing.

Lighting and traffic sales of $182.6 million increased 2.1% year-over-year, primarily due to favorable pricing across all markets.

Wireless communication structures and components sales of $50.4 million were similar to last year's record fourth-quarter sales. Higher volumes in Europe and favorable pricing in all regions were offset by slightly lower volumes in North American markets.

Access Systems sales of $23.0 million decreased 12.2% year-over-year as expected, due to lower volumes from strategically exiting product lines.

Operating Income was $19.2 million or 7.5% of sales ($24.4 million adjusted1 or 9.5% of sales), compared to $10.5 million or 4.1% of sales in 2019. Profitability improvement was driven by favorable pricing and the non-recurrence of one-time losses in the Access Systems business in fourth quarter 2019.

Coatings Segment (11.2% of Sales)

Galvanizing, painting and anodizing services to preserve and protect metal products

Sales of $89.3 million were similar to last year, as higher internal and international market volumes were offset by lower external volumes in North America due to disruptions from COVID-19 on end customers.

Operating Income was $9.4 million or 10.5% of sales ($11.8 million adjusted1 or 13.2% of sales), compared to $12.0 million or 13.4% of sales in 2019. Favorable pricing and operational efficiency improvements were offset by lower volumes.

Agriculture

Irrigation Segment (25.0% of Sales)

Irrigation equipment, center pivots and linears for agricultural markets, including, parts, services, and tubular products, and advanced technology solutions for water management and precision agriculture

Global sales of $199.3 million increased 49.8% year-over-year, due to higher volumes across all markets, particularly in the Middle East, partially offset by $6.3 million of unfavorable currency impacts primarily from the depreciation of the Brazilian Real.

North American sales of $97.1 million increased 14.8% compared to 2019, due to higher volumes across all irrigation product lines, and higher industrial tubing sales.

International sales of $102.2 million more than doubled year-over-year and increased more than 120.0% in local currencies. Sales growth was led by initial deliveries of the large multi-year Egypt project, higher volumes in South American and European markets, including continued strong demand in Brazil, and sales from recent acquisitions.

Operating Income was $22.3 million, or 11.2% of sales ($25.3 million adjusted1 or 12.7% of sales), compared to $11.8 million, or 8.9% of sales in 2019. Profitability growth was driven by higher volumes and improved operational efficiency, partially offset by higher SG&A expense, including $1.4 million of incremental R&D expense for technology growth investments.

Continuation of Enhanced COVID-19 Safety Protocols

To protect the safety, health and well-being of employees, customers, suppliers and communities, Valmont continues to follow CDC, WHO and local guidelines in all its facilities. The Company monitors health advisories on a continuous basis, and continues to take deliberate steps to protect all stakeholders and minimize the operational and financial impacts on the business during the pandemic. During the fourth quarter, Valmont did not experience any significant disruptions in its operations or supply chain.

Balance Sheet, Liquidity and Capital Allocation

The Company continues to generate strong cash flows through a focus on working capital management, including strategic customer payment initiatives and improvements in inventory turns. Cash and cash equivalents were $400.7 million at end of the fourth quarter. Valmont purchased $28.5 million of company stock in the fourth quarter, and $148.0 million remains on the current authorization, with no expiration. During the quarter, Fitch reaffirmed the Company’s BBB-/Stable credit rating. Valmont remains committed to maintaining its Investment Grade rating. The Company generated free cash flow of 1.5 times net earnings, exceeding its long-term financial goal for the year.

Voluntary One-Time Early Retirement Benefit Program

Earlier in the year, Valmont initiated a one-time, voluntary Early Retirement Program. Approximately 6.0% of the U.S. administrative workforce chose the program, resulting in pre-tax charges of $10.9 million ($8.2 million after-tax) which are included in GAAP fourth quarter segment results. The impact to GAAP EPS was ($0.38) with an expected payback of 24 months.

First-Quarter and Full Year 2021 Financial Outlook and Key Assumptions

While certain aspects of the pandemic's impact on global economic factors and pace of economic recovery remain uncertain, the Company will continue to provide a greater level of transparency, including key assumptions and indications for first quarter 2021, to help the financial community understand short-term impacts and expectations. The Company is also providing certain key assumptions and indications for full-year 2021.

While improving visibility has enabled management to reinstate guidance for 2021, a wider than historical range has been provided for some metrics, to account for an operating environment that remains dynamic. Additionally, the Company is providing Irrigation segment sales estimates due to expected significantly higher sales led by the large project for Egypt, continued strong net farm income levels and positive farmer sentiment, and a robust Brazilian market.

1Q 2021 Financial Outlook

  • 1Q Net Sales estimated to be $740.0 - $765.0 million, an increase of 10.0% - 13.0% vs. prior year
  • 1Q Operating Profit Margin estimated to be 9.0% - 10.0%
  • 1Q Irrigation segment sales estimated to be $235.0 - $245.0 million, an increase of 50.0% - 56.0% vs. prior year

Full Year 2021 Financial Outlook and Key Assumptions

  • Net Sales estimated to increase 9.0% - 14.0% vs. prior year
  • Favorable foreign currency translation impact of approximately 2.0% of Net Sales
  • Irrigation segment sales estimated to significantly increase 27.0% - 30.0% vs. prior year
  • In Utility Support Structures, significant raw material cost inflation will negatively impact gross profit margins in the first half of 2021
  • Diluted Earnings per Share estimated to be $9.00 - $9.70
  • Tax rate between 24.0% - 25.0%
  • Capital expenditures to be in the range of $110 - $120 million to support strategic growth initiatives and Industry 4.0 advanced manufacturing initiatives
  • No closures of large manufacturing facilities, workforce disruptions, or significant supply chain interruptions due to COVID-19

Further, the Company has made the decision to divest the Access Systems product line. During 2021, Valmont will continue to strategically evaluate certain product lines and geographic market presence across its businesses. If needed, adjustments to the 2021 financial outlook will be provided in future quarters.

Kaniewski added, "As we turn our focus to 2021, the safety and well-being of our employees remains our number one imperative, while we continue to execute and drive growth and performance. We are entering the year with a record backlog of more than $1.1 billion, and expect to benefit from market tailwinds across many of our global markets this year. Backlog in the Utility Support Structures segment remains at elevated levels, which is providing a good line of sight for us well into the year. Additionally, during first quarter we were awarded the third purchase order of approximately $65 million for the large project in the southeast U.S., providing good momentum as we start the year. In the Engineered Support Structures segment, we expect growing demand in wireless communications markets as 5G build-outs continue to ramp. Our Coatings business is trending in-line with improving industrial production levels. In Irrigation, the large, multi-year project for Egypt and favorable market trends globally are providing strong momentum, and improved net farm income is leading to positive grower sentiment. Across the portfolio, we have already implemented pricing strategies to recover the impact of unprecedented raw material cost increases. Additionally, our strong balance sheet and cash flows give us flexibility to execute our long-term strategic plan. Our strategy remains focused on long-term growth, and an organizational emphasis on ESG principles, Return on Invested Capital, Operational Excellence and strengthening our organization for the future. We look forward to delivering another year of strong returns to our shareholders in 2021."

A live audio discussion with Stephen G. Kaniewski, President and Chief Executive Officer, and Avner M. Applbaum, Executive Vice President and Chief Financial Officer, will be accessible by telephone on Thursday, February 18, 2021 at 8:00 a.m. CST by dialing 1-877-407-6184 or 1-201-389-0877 (no Conference ID needed), or via webcast by pointing browsers to this link: Valmont Industries 4Q 2020 and Full Year Earnings Conference Call. A slide presentation will simultaneously be available for download on the Investors page at valmont.com. A replay of the event can be accessed two hours after the call at the above link or by telephone at 1-877-660-6853 or 1-201-612-7415. Please use conference identification number 13713718. The replay will be available through 10:59 p.m. CST on February 25, 2021.

About Valmont Industries, Inc.

Valmont is a global leader, designing and manufacturing engineered products and services that support global infrastructure development and agricultural productivity. Its products for infrastructure serve highway, transportation, wireless communication, electric transmission, and industrial construction and energy markets. Its irrigation equipment and services for large-scale agriculture improve farm productivity while conserving fresh water resources. In addition, Valmont provides coatings services that protect against corrosion and improve the service life of steel and other metal products. For more information, visit valmont.com.

Concerning Forward-Looking Statements

This release contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on assumptions that management has made in light of experience in the industries in which Valmont operates, as well as management’s perceptions of historical trends, current conditions, expected future developments and other factors believed to be appropriate under the circumstances. As you read and consider this release, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties (some of which are beyond Valmont’s control) and assumptions. Although management believes that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect Valmont’s actual financial results and cause them to differ materially from those anticipated in the forward-looking statements. These factors include among other things, the continuing and developing effects of COVID-19 including the effects of the outbreak on the general economy and the specific economic effects on the Company’s business and that of its customers and suppliers, risk factors described from time to time in Valmont’s reports to the Securities and Exchange Commission, as well as future economic and market circumstances, industry conditions, company performance and financial results, operating efficiencies, availability and price of raw material, availability and market acceptance of new products, product pricing, domestic and international competitive environments, and actions and policy changes of domestic and foreign governments. The Company cautions that any forward-looking statement included in this press release is made as of the date of this press release and the Company does not undertake to update any forward-looking statement.

1 Please see Reg G reconciliation of GAAP sales, operating income, net earnings and EPS to Adjusted figures at end of document

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Dollars in thousands, except per share amounts)

(unaudited)

 

 

Fourth Quarter

 

Year-to-Date

 

13 Weeks Ended

 

Year Ended

 

 

 

 

 

 

 

 

 

26-Dec-20

 

28-Dec-19

 

26-Dec-20

 

28-Dec-19

Net sales

$

798,377

 

 

$

683,626

 

 

$

2,895,355

 

 

$

2,766,976

 

Cost of sales

593,796

 

 

517,035

 

 

2,129,841

 

 

2,084,295

 

Gross profit

204,581

 

 

166,591

 

 

765,514

 

 

682,681

 

Selling, general and administrative expenses

150,442

 

 

115,826

 

 

522,923

 

 

454,776

 

Impairment of goodwill and intangible assets

—

 

 

—

 

 

16,638

 

 

—

 

Operating income

54,139

 

 

50,765

 

 

225,953

 

 

227,905

 

Other income (expense)

 

 

 

 

 

 

 

Interest expense

(10,509

)

 

(10,182

)

 

(41,075

)

 

(40,153

)

Interest income

443

 

 

1,127

 

 

2,374

 

 

3,942

 

Gain on investments (unrealized)

1,341

 

 

1,206

 

 

2,443

 

 

5,960

 

Other

1,724

 

 

266

 

 

3,073

 

 

2,204

 

Other income (expense), net

(7,001

)

 

(7,583

)

 

(33,185

)

 

(28,047

)

Earnings before income taxes

47,138

 

 

43,182

 

 

192,768

 

 

199,858

 

Income tax expense

10,443

 

 

8,987

 

 

49,615

 

 

47,753

 

Equity in (loss) of nonconsolidated subsidiaries

(249

)

 

—

 

 

(1,004

)

 

—

 

Net earnings

36,446

 

 

34,195

 

 

142,149

 

 

152,105

 

Less: (Earnings) attributable to non-controlling interests

(631

)

 

(1,655

)

 

(1,456

)

 

(5,697

)

Net earnings attributable to Valmont Industries, Inc.

$

35,815

 

 

$

32,540

 

 

$

140,693

 

 

$

146,408

 

 

 

 

 

 

 

 

 

Average shares outstanding (000's) - Basic

21,184

 

 

21,462

 

 

21,315

 

 

21,659

 

Earnings per share - Basic

$

1.69

 

 

$

1.52

 

 

$

6.60

 

 

$

6.76

 

 

 

 

 

 

 

 

 

Average shares outstanding (000's) - Diluted

21,342

 

 

21,596

 

 

21,425

 

 

21,769

 

Earnings per share - Diluted

$

1.68

 

 

$

1.51

 

 

$

6.57

 

 

$

6.73

 

 

 

 

 

 

 

 

 

Cash dividends per share

$

0.450

 

 

$

0.375

 

 

$

1.800

 

 

$

1.500

 

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

SUMMARY OPERATING RESULTS

(Dollars in thousands)

(unaudited)

 

 

Fourth Quarter

 

Year-to-Date

 

13 Weeks Ended

 

Year Ended

 

26-Dec-20

 

28-Dec-19

 

26-Dec-20

 

28-Dec-19

Net sales

 

 

 

 

 

 

 

Utility Support Structures

$

271,031

 

 

$

231,871

 

 

$

1,002,209

 

 

$

890,580

 

Engineered Support Structures

256,057

 

 

255,196

 

 

995,840

 

 

1,012,290

 

Coatings

89,336

 

 

89,693

 

 

345,312

 

 

367,835

 

Infrastructure products

616,424

 

 

576,760

 

 

2,343,361

 

 

2,270,705

 

Irrigation

199,263

 

 

133,015

 

 

645,831

 

 

585,196

 

Less: Intersegment sales

(17,310

)

 

(26,149

)

 

(93,837

)

 

(88,925

)

Total

$

798,377

 

 

$

683,626

 

 

$

2,895,355

 

 

$

2,766,976

 

 

 

 

 

 

 

 

 

Operating Income

 

 

 

 

 

 

 

Utility Support Structures

$

25,600

 

 

$

26,345

 

 

$

100,855

 

 

$

87,788

 

Engineered Support Structures

19,159

 

 

10,475

 

 

65,342

 

 

65,627

 

Coatings

9,357

 

 

11,971

 

 

42,975

 

 

51,008

 

Infrastructure products

54,116

 

 

48,791

 

 

209,172

 

 

204,423

 

Irrigation

22,345

 

 

11,819

 

 

83,046

 

 

71,687

 

Corporate

(22,322

)

 

(9,845

)

 

(66,265

)

 

(48,205

)

Total

$

54,139

 

 

$

50,765

 

 

$

225,953

 

 

$

227,905

 

The backlog of orders for the principal products manufactured and marketed was $1,139.1 million at the end of the 2020 fiscal year and $924.1 million at the end of the 2019 fiscal year. An order is reported in our backlog upon receipt of a purchase order from the customer or execution of a sales order contract. We anticipate that most of the 2020 backlog of orders will be filled during fiscal year 2021 . At year-end, the segments with backlog were as follows (dollar amounts in millions):

 

12/26/2020

 

12/28/2019

Engineered Support Structures

$

247.1

 

 

$

254.0

 

Utility Support Structures

563.3

 

 

615.0

 

Irrigation

328.3

 

 

55.0

 

Coatings

0.4

 

 

0.1

 

 

$

1,139.1

 

 

$

924.1

 

Valmont has aggregated its business segments into four global reportable segments as follows.

Utility Support Structures: This segment consists of the manufacture of engineered steel and concrete structures for utility markets, including transmission, distribution, and substation products, and renewable energy generation equipment.

Engineered Support Structures: This segment consists of the manufacture and distribution of engineered poles, towers, and components for lighting, transportation, and wireless communication markets, including integrated structure solutions for smart cities, and engineered access systems.

Coatings: This segment consists of global galvanizing, painting and anodizing services to preserve and protect metal products.

Irrigation: This segment consists of the global manufacture of agricultural irrigation equipment, parts, services, tubular products, and advanced technology solutions for water management and precision agriculture.

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

(unaudited)

 

 

26-Dec-20

 

28-Dec-19

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

400,726

 

 

$

353,542

 

Accounts receivable, net

517,607

 

 

480,000

 

Inventories

448,941

 

 

418,370

 

Contract asset - costs and profits in excess of billings

123,495

 

 

141,322

 

Prepaid expenses and other assets

59,804

 

 

32,043

 

Refundable income taxes

9,945

 

 

6,947

 

Total current assets

1,560,518

 

 

1,432,224

 

Property, plant and equipment, net

597,727

 

 

558,129

 

Goodwill and other assets

800,808

 

 

816,863

 

 

$

2,959,053

 

 

$

2,807,216

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

Current liabilities:

 

 

 

Current installments of long-term debt

$

2,748

 

 

$

760

 

Notes payable to banks

35,147

 

 

21,774

 

Accounts payable

268,099

 

 

197,957

 

Accrued expenses

227,735

 

 

167,264

 

Contract liability - billings in excess of costs and earnings

135,911

 

 

117,945

 

Dividend payable

9,556

 

 

8,079

 

Total current liabilities

679,196

 

 

513,779

 

Long-term debt, excluding current installments

728,431

 

 

764,944

 

Other long-term liabilities

343,590

 

 

338,748

 

Shareholders' equity

1,207,836

 

 

1,189,745

 

 

$

2,959,053

 

 

$

2,807,216

 

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(unaudited)

 

 

YTD

 

YTD

 

26-Dec-20

 

28-Dec-19

Cash flows from operating activities

 

 

 

Net Earnings

$

142,149

 

 

$

152,105

 

Depreciation and amortization

82,892

 

 

82,264

 

Impairment of long-lived assets

20,389

 

 

—

 

Contribution to defined benefit pension plan

(35,399

)

 

(18,461

)

Change in working capital

52,282

 

 

80,651

 

Other

53,981

 

 

11,055

 

Net cash flows from operating activities

316,294

 

 

307,614

 

 

 

 

 

Cash flows from investing activities

 

 

 

Purchase of property, plant, and equipment

(106,700

)

 

(97,425

)

Acquisitions

(15,862

)

 

(81,841

)

Other

18,533

 

 

11,116

 

Net cash flows from investing activities

(104,029

)

 

(168,150

)

 

 

 

 

Cash flows from financing activities

 

 

 

Proceeds from long-term borrowings

88,872

 

 

31,000

 

Proceeds (payments) from short-term borrowings

13,044

 

 

11,327

 

Principal payments on long-term borrowings

(121,665

)

 

(10,768

)

Purchase of treasury shares

(56,491

)

 

(62,915

)

Purchase of noncontrolling interest

(59,416

)

 

(27,845

)

Dividends paid

(36,930

)

 

(32,642

)

Other

(1,170

)

 

(7,107

)

Net cash flows from financing activities

(173,756

)

 

(98,950

)

Effect of exchange rates on cash and cash equivalents

8,675

 

 

(182

)

Net change in cash and cash equivalents

47,184

 

 

40,332

 

Cash and cash equivalents - beginning of year

353,542

 

 

313,210

 

Cash and cash equivalents - end of period

$

400,726

 

 

$

353,542

 

 

 

26-Dec-20

 

28-Dec-19

Cash flow from operations

$

316,294

 

 

$

307,614

 

Purchase of property, plant, and equipment

(106,700

)

 

(97,425

)

Free Cash flows

$

209,594

 

 

$

210,189

 

 

 

 

 

Net earnings

$

140,693

 

 

146,408

 

Free cash flow conversion - Net earnings

1.5

 

 

1.4

 

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
SUMMARY OF EFFECT OF SIGNIFICANT NON-RECURRING ITEMS ON REPORTED RESULTS
REGULATION G RECONCILIATION
(Dollars in thousands, except per share amounts)
(unaudited)

The non-GAAP tables below disclose the impact on (a) diluted earnings per share of (1) impairment of goodwill, and tradenames, (2) restructuring costs and non-recurring asset impairments (b) operating income from these expenses, and (c) segment operating income for these items. Amounts may be impacted by rounding. We believe it is useful when considering company performance for the non-GAAP adjusted net earnings and operating income to be taken into consideration by management and investors with the related reported GAAP measures.

 

Thirteen
weeks ended
December 26,
2020

 

Diluted
earnings per
share

 

Year ended
December 26,
2020

 

Diluted
earnings per
share

 

 

 

 

 

 

 

 

Net earnings attributable to Valmont Industries, Inc. - as reported

$

35,815

 

 

$

1.68

 

 

$

140,693

 

 

$

6.57

 

Impairment of goodwill and intangible assets, pre-tax

—

 

 

—

 

 

16,638

 

 

0.78

 

Restructuring and asset impairment costs - pre-tax

14,660

 

 

0.69

 

 

25,871

 

 

1.21

 

Total Adjustments

14,660

 

 

0.69

 

 

42,509

 

 

1.98

 

Tax effect of adjustments *

(3,619

)

 

(0.17

)

 

(6,372

)

 

(0.30

)

UK tax rate change

—

 

 

—

 

 

(1,528

)

 

(0.07

)

Net earnings attributable to Valmont Industries, Inc. - Adjusted

$

46,856

 

 

$

2.20

 

 

$

175,302

 

 

$

8.18

 

Average shares outstanding (000’s) - Diluted

 

 

21,342

 

 

 

 

21,425

 

* The tax effect of adjustments is calculated based on the income tax rate in each applicable jurisdiction.

 

 

Thirteen
weeks ended
December 26,
2020

 

Year ended
December 26,
2020

 

 

 

Operating Income Reconciliation

 

 

Operating income - as reported

 

$

54,139

 

 

$

225,953

 

Impairment of goodwill and tradename

 

—

 

 

16,638

 

Restructuring and asset impairment costs

 

14,660

 

 

25,871

 

Adjusted Operating Income

 

$

68,799

 

 

$

268,462

 

Net Sales - as reported

 

798,377

 

 

2,895,355

 

Operating Income as a % of Sales

 

6.8

%

 

7.8

%

Adjusted Operating Income as a % of Sales

 

8.6

%

 

9.3

%

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

SUMMARY OF EFFECT OF SIGNIFICANT NON-RECURRING ITEMS ON REPORTED RESULTS

REGULATION G RECONCILIATION (CONTINUED)

For the fourth quarter ended December 26, 2020

 

Engineered

 

Utility

 

 

 

 

 

 

 

Support

 

Support

 

 

 

 

 

 

Segment Operating Income Reconciliation

Structures

 

Structures

 

Coatings

 

Irrigation

 

Corporate

 

 

 

 

 

 

 

 

 

 

Operating income - as reported

$

19,159

 

 

$

25,600

 

 

$

9,357

 

 

$

22,345

 

 

$

(22,322

)

Restructuring and related asset impairment costs

5,220

 

 

2,388

 

 

2,445

 

 

2,968

 

 

1,639

 

Adjusted Operating Income

$

24,379

 

 

$

27,988

 

 

$

11,802

 

 

$

25,313

 

 

$

(20,683

)

 

 

 

 

 

 

 

 

 

 

Net sales

$

256,057

 

 

$

271,031

 

 

$

89,336

 

 

$

199,263

 

 

—

 

 

 

 

 

 

 

 

 

 

 

Operating Income as a % of Sales

7.5

%

 

9.4

%

 

10.5

%

 

11.2

%

 

NM

 

 

 

 

 

 

 

 

 

 

Adjusted Operating Income as a % of Sales

9.5

%

 

10.3

%

 

13.2

%

 

12.7

%

 

NM

For the year ended December 26, 2020

 

Engineered

 

Utility

 

 

 

 

 

 

 

Support

 

Support

 

 

 

 

 

 

Segment Operating Income Reconciliation

Structures

 

Structures

 

Coatings

 

Irrigation

 

Corporate

 

 

 

 

 

 

 

 

 

 

Operating income - as reported

$

65,342

 

 

$

100,855

 

 

$

42,975

 

 

$

83,046

 

 

$

(66,265

)

Impairment of goodwill and tradename

16,638

 

 

—

 

 

—

 

 

—

 

 

—

 

Restructuring and related asset impairment costs

7,584

 

 

9,363

 

 

3,951

 

 

2,968

 

 

2,005

 

Adjusted Operating Income

$

89,564

 

 

$

110,218

 

 

$

46,926

 

 

$

86,014

 

 

$

(64,260

)

 

 

 

 

 

 

 

 

 

 

Net sales

$

995,840

 

 

$

1,002,209

 

 

$

345,312

 

 

$

645,831

 

 

—

 

 

 

 

 

 

 

 

 

 

 

Operating Income as a % of Sales

6.6

%

 

10.1

%

 

12.4

%

 

12.9

%

 

NM

 

 

 

 

 

 

 

 

 

 

Adjusted Operating Income as a % of Sales

9.0

%

 

11.0

%

 

13.6

%

 

13.3

%

 

NM